Crowded Baltimore sponsorship market strained by new sports entities

Chris Korman, The Baltimore Sun

Baltimore's reputation as a sports city continues to grow, thanks to the Super Bowl champion Ravens and the surging Orioles. It's also known for losing corporate headquarters, making it the largest U.S. city without a Fortune 500 company.

That disconnect means competition for corporate sponsors who underwrite sporting events and venues is intense, and some worry that supply is outpacing demand.

This week, organizers of the Grand Prix of Baltimore acknowledged they won't be able to land a title sponsor for the Labor Day weekend car-racing event. Other event planners are still searching. The LPGA, which will host a tournament in Owings Mills next year, has invited prominent business leaders to the course for a presentation Monday meant to generate interest in the event.

The Colonial Athletic Association, which in 2014 will begin a three-year stint of holding its basketball tournament in Baltimore, also is on the hunt for sponsors. And venues such as 1st Mariner Arena are looking for companies willing to pay to put their names on the buildings.

Sponsorships can be a difficult sell here, said Leffler Agency founder Bob Leffler, who has workedin advertising and marketing in Baltimore for more than 30 years.

"It's a back-office town," Leffler said. "There are very few people here these days with the authority to decide their company is going to spend six figures on a sponsorship deal. And if they're having to run to New York or somewhere to pitch the idea, it's not going to resonate as strongly with the people there."

Leaders in local government and the business community envision Baltimore as a destination for more large-scale sporting events, such as the Grand Prix, NCAA lacrosse games and possibly even Olympic events. But decision makers for sports organizations may be reluctant to choose Baltimore if the market for sponsorship dollars becomes oversaturated.

"Given the competitiveness of the market, an event or entity can't expect to come into the market and easily find the sponsorships they need," said Marty Conway, an adjunct professor in Georgetown University's sports industry program and a former executive with marketing firmIMRE and the Orioles.

"All markets are more segmented than they've ever been, and there's tremendous pressure on the Baltimore area right now."

Conway said Baltimore's push to become a sports destination — with events like Sunday's Gold Cup soccer games — has lacked the sort of cooperation between government and business leaders that made previous projects, such as the building of Camden Yards and the NFL's return to the city, possible.

Others say the city has been proactive in pushing for support. Tom Chuckas, president of the MarylandJockey Club, said Mayor Stephanie Rawlings-Blake has advocated on behalf of the Preakness, the second leg of horse racing's Triple Crown. Terry Hasseltine, the director of the Maryland Office of Sports Marketing, said one of his primary duties is connecting sports event organizers to the business community.

"It's a tight, tight market, for sure," Hasseltine said. "So that's one of our challenges, bringing people together and making sure the money is there. But it's something we've been doing and will need to continue to do."

While businesses are still interested in sponsorship packages, many have smaller budgets and numerous options for reaching customers. Marketing budgets were cut during the recession and have yet to see a major rebound, experts said.

Meanwhile, the number of sports entities seeking support has grown.

The Grand Prix, in its third year, has never secured a title sponsor. Organizers said they are still seeking a company willing to pay more than $1 million to put its name on the race in 2014.

Lesser Grand Prix sponsorships — including from local companies Esskay and Maryland Live Casino — have increased, and Debbie Bell, the event's vice president for sales and marketing, believes more local companies will invest in the near future. And the race weekend does have a presenting sponsor, SRT, a racing-focused subsidiary of Chrysler brought on by Andretti Sports Marketing.

J.P. Grant, managing partner in Grand Prix organizer Race On LLC, described a climate in Baltimore where companies are hesitant to spend marketing dollars on anything but established events and organizations. He has urged more investment in upstart projects.

"You've got to think about what life is going to be like in 15 or 20 years, and about making the city into what it can be," he said. "There's got to be some long-range vision."

Race On officials have said repeatedly that the success of their event depends on the ability to generate revenue via sponsorships, particularly at the local level.

The Colonial Athletic Association also has been trying to sell naming rights for its three years of Baltimore-based tournaments for $200,000.

Meanwhile, the CAA's local member, Towson University, is negotiating with Linthicum-based credit union SECU on a naming-rights deal for the school's new Tiger Arena, a $70 million project, according to university officials. SECU officials could not be reached for comment.

Towson's athletic department chipped in $6,000 for signs throughout the building to entice sponsors. That advertising revenue would help fill a budget deficit that led the university to move to cut the men's soccer and baseball programs this spring. Baseball has since been saved.

In downtown Baltimore, 1st Mariner Arena is looking to sell its naming rights at a significant increase from the $75,000 per year it received from 1st Mariner Bank from 2002 until last year. Officials from Legends Sales and Marketing, which is handling the sale, declined to comment on the buyer search.

The University of Maryland will likely widen its sponsorship search in the coming years to take advantage of the move to the Big Ten. The conference's footprint will include New York, Washington and Chicago, making its teams more enticing to advertisers.

Events that travel to Baltimore intermittently also need sponsorship support. M&T Bank Stadium will host the Army-Navy football game in 2014 and 2016, and has moved to host more college football games. State officials are preparing a bid to secure future NCAA lacrosse championships, as well.

And the LPGA, which will host its International Crown event at Caves Valley Golf Club next year, is hoping to augment ticket sales and other revenue with sponsorships.

"There's no question we need the support of the local business community to truly consider this a success," said Rich Thomas, the tournament director.

Established events like the Preakness and Baltimore Running Festival also are looking for more support from sponsors. The Preakness came close to landing Constellation Energy Group as a title sponsor several years ago for more than $1 million, Chuckas said, but the deal fell apart. Constellation officials could not be reached for comment.

"From the Jockey Club's perspective, we'd love to have a title sponsor," Chuckas said. "Any money we can bring in through corporate partnerships improves our event and helps us keep the cost to our customers low."

Both the Preakness and the Running Festival, which includes the Baltimore Marathon, are bolstered by ties to one of the region's most successful companies — and most aggressive marketers. Under Armour is the primary sponsor for the Baltimore Running Festival and, along with affiliate Sagamore Racing, annually finances the most lavish tent in the Pimlico Race Course infield for the Preakness.

Under Armour also invests heavily with the area's most marketable brand, paying an undisclosed amount to have the Ravens' headquarters dubbed the Under Armour Performance Center.

An affiliation with the Orioles or Ravens is attractive to a wide range of businesses. Those teams reach hundreds of thousands of engaged fans, most of whom grew up rooting for Baltimore sports teams and remain emotionally invested in them.

But the price for affiliating with those organizations excludes many companies.

M&T Bank was new to the market in 2003 when it agreed to pay an average of $5 million per year to put its name on the Ravens stadium. That deal ends in 2018, and the Ravens may be due for a raise; the San Francisco 49ers agreed to a deal with Levi's in May that will net $220 million over 11 years.

Less expensive opportunities do exist. The Orioles offer companies the chance to buy anything from signs behind the plate to sleeves on turnstiles.

Not that the Orioles and Ravens have it easy. Their markets are crowded by nearby teams in D.C. and Philadelphia, lessening their appeal to national and regional companies — which have countless other marketing opportunities throughout the Mid-Atlantic — and pushing them to seek local support.

Donald C. Fry, who has been a driving force behind efforts to build a new arena downtown, sees Under Armour's emergence as a reason to believe Baltimore will be able to grow as a sports destination.

"It's not like it used to be in Baltimore, that's true," said Fry, who also serves as president and CEO of the Greater Baltimore Committee, an association of local businesses. "But I think you're just seeing evolution. New companies are filling in where old ones left, and they're invested in the community."

Sponsorship has evolved into the most important way for a brand to reach consumers, according to Jason Belzer, a sports attorney and founder of Global Athlete Management Enterprises, a marketing agency working with college coaches and sports properties. Simply buying advertising time on television, radio or in newspapers fails to reach a fragmented audience.

"It's much more important for companies to find a unique way to integrate with teams and events to make sure their message is being heard," he said.

The Grand Prix's Bell said she targeted Esskay — known for its hot dogs — and Maryland Live because of the strategic tie-ins. Esskay will sponsor the kids' zone, while the casino's sponsorship will be aimed at making it clear to visitors that there's another entertainment option available 15 miles down the road after the race.

Sponsorship deals, in turn, help raise the profile of sporting events and venues, said Conway, the Georgetown professor. The most successful ones are able to craft deals with a wide range of companies, not just those that are a natural fit.

"It's important for an event or team or venue to become a real part of the community in a significant way, not just the ways that immediately make the most sense," he said. "That broadens the appeal and ability to generate revenue. That's the way to measure success."